CREDIT APPRAISAL OF TERM CREDIT APPRAISAL OF TERM LOAN IN SOUTH INDIAN BANKLOAN IN SOUTH INDIAN BANK

LTD, lucknow LTD, lucknow

PRESENTED BY:

NITIN RITESH MASSEY

Lender appraises the creditworthiness . It is a very important step. Every potential borrower has to go through it. All banks have their own rules to decide the credit worthiness

of their borrowers. RBI regularly gives the guidelines

Why do we appraise? Is a Selection Tool Quantifies Risk Aids Decision Making Ensure Good Quality business with excellent creditworthiness

“ Longer and complicated Credit Appraisal Process at South Indian

Bank results in low revenue growth of Bank” RESEARCH METHODOLOGY RESEARCH METHODOLOGY

OBJECTIVE OF THE STUDY:  To completely understand the Credit Appraisal process of South

Indian Bank. To Compare the Credit Appraisal period for different Banks in

same domain. To understand the impact of longer credit appraisal period on

potential revenue growth.

RESEARCH DESIGN:Analytical.

PRIMARY DATA:

Questionnaire and interviewing people availing loan.

SECONDARY DATA:

Reports published by CRISIL, RBI and Banking Journals

DIFFERENT BANKS CHOSEN: axis, icici,hdfc, kotak mahindra, south indian bank

TYPE OF LOAN ANALYSED:

Home Loan Amount Rs 5 lakhs to Rs 20 lakhs

SAMPLE SIZE:25 people

LOAN PROCESS:

DISCUSSION→APPLICATION→APPRAISAL→SANCTION→DOCUMENTATION→DISBURSEMENT→CREATION OF ASSETS→FOLLOWUP→INSPECTION →ENSURE ENDUSE→MONITORING AND RISK

The credit department thoroughly analyses the credit requirement of the company and the capacity to service the debt. 

The credit appraisal passes through various stages and evaluations before it is appraised

Analysis reveals that the credit appraisal process in SIB takes more time then compared with its peer banks. 

Analysis reveals that SIB is conservative in granting advances and has time taking credit appraisal process due to which the growth in the revenue is less as compared to its peer bank 

SUGGESTIONSUGGESTION The credit appraisal process should be

made faster without exposing to the risk.

More people should be trained to handle the credit appraisal process

More authority should be given to the Branch Manager to sanction the loan

Banks should focus more on retail customers

All the documents required to appraise the project should be asked at the time of application only rather than later by the bank

 

Credit Appraisal is a process of appraising the creditworthiness of loan applicants. The funds of depositor’si.e. general public are mobilized by means of suchadvance / investment. Thus it extremely important forthe lender bank to assess the risk associated with credit;thereby ensure the security for the funds deposited by thedepositors. But at the same time it is the source of fund forthe bank hence if the process is made faster withoutcompromising with the risk factors it will attract morecustomer which will result in higher revenue for the bank.